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GM Q3 Earnings Beat Estimates on North America Strength
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Key Takeaways
GM's Q3 adjusted EPS rose to $3.70, beating estimates, while revenues climbed to $50.02B.
GM's North America's adjusted EBIT surged 43.4%, driven by lower warranty costs and improved vehicle mix.
GM raised its 2026 FCF outlook to $11.5-$12.5B and authorized a $20B share buyback program.
General Motors (GM - Free Report) reported third-quarter 2026 adjusted earnings of $3.7 per share, up 32.2% year over year. The figure surpassed the Zacks Consensus Estimate of $3.55. Higher wholesale volumes, favorable vehicle mix and cost efficiencies supported the outperformance.
Revenues increased 2.9% to $50.02 billion and beat the consensus estimate of $48.21 billion. Global wholesale volume rose to 1.03 million vehicles from 976,000 a year earlier. Adjusted earnings before interest and taxes (EBIT) increased 21.6% to $4.11 billion, while adjusted EBIT margin expanded 130 basis points to 8.2%.
General Motors Company Price, Consensus and EPS Surprise
GM North America generated revenues of $41.42 billion, up 2.1% from the prior-year quarter. Wholesale volume increased to 870,000 vehicles from 840,000, supported by higher internal combustion engine (ICE) shipments. ICE volume increased by 53,000 units, partly offset by a 23,000-unit decline in electric vehicle volume.
The segment's adjusted EBIT surged 43.4% to $3.59 billion. Adjusted EBIT margin expanded 250 basis points to 8.7%. Lower warranty costs, favorable EV inventory adjustments and improved vehicle mix supported profitability. Higher commodity, logistics and manufacturing costs partly offset these benefits.
U.S. dealer inventory ended the quarter at 568,000 vehicles compared with 527,000 a year earlier. The company maintained pricing discipline, with incentives averaging 4.8% of manufacturer's suggested retail price, below the industry average of 6.6%.
General Motors' International Operations Face Pressure
GM International revenues increased 12.1% year over year to $4.09 billion. Wholesale volume climbed to 159,000 vehicles from 137,000, supported by higher shipments in South America.
However, adjusted EBIT declined 87.6% to $28 million. Higher manufacturing and logistics expenses, alongside a negative mark-to-market adjustment related to GM's investment in Momenta, weighed on profitability. Higher volumes and favorable foreign exchange movements provided partial relief.
GM's China joint ventures generated equity income of $32 million, down 60% year over year. Nevertheless, the China business delivered its eighth consecutive profitable quarter, supported by restructuring efforts and strong new-energy vehicle sales.
GM Financial Encounters Higher Credit Costs
GM Financial revenues declined marginally to $4.31 billion from $4.34 billion in the year-ago quarter. Ending earning assets increased to $126.9 billion from $126.5 billion.
Adjusted earnings before taxes declined 16.9% to $668 million. Lower interest expenses and higher retail yields were offset by increased provisions for loan losses and higher lease depreciation expenses. The financing arm paid a $250 million dividend to GM during the quarter, bringing year-to-date dividends to $1.2 billion.
General Motors' Digital Business Continues to Expand
OnStar ended the quarter with deferred revenues of $6.8 billion, up approximately 40% year over year. Recognized revenues exceeded $800 million, increasing 15%. The company remained on track to add approximately 1 million subscribers in 2026, approaching 13 million by year-end.
Super Cruise recognized revenues increased approximately 60%. GM delivered around 83,000 Super Cruise-equipped vehicles during the quarter, bringing year-to-date sales above 243,000 units. Management expects to exceed 850,000 subscribers by year-end, with the post-three-year prepaid subscription attach rate remaining between 30% and 40%.
GM's Cash Flow Strengthens Shareholder Returns
Automotive operating cash flow increased 32.6% to $8.05 billion. Adjusted automotive free cash flow jumped 40% to $5.88 billion, driven by higher automotive earnings and tariff-related timing benefits.
Capital expenditures totaled $2.33 billion for automotive operations. GM repurchased $2.5 billion of shares, retiring approximately 29 million shares, and distributed $200 million in dividends. Automotive cash and marketable securities totaled $23.1 billion, while total automotive liquidity reached $37.1 billion. The board also authorized a new $20 billion multi-year share repurchase program.
General Motors Updates 2026 Outlook
General Motors narrowed its full-year adjusted EBIT guidance to $14.5-$15.5 billion from $14-$16 billion. Adjusted earnings are now projected at $12.75-$13.75 per share, compared with the previous range of $12-$14.
The company raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion. It maintained expectations for an 8-10% adjusted EBIT margin in North America and capital spending, including battery joint-venture investments, of $10-$12 billion.
Management expects warranty savings toward the upper end of $1-$1.5 billion, while commodity inflation, including logistics and memory-chip costs, is projected at approximately $2 billion. Gross tariff costs are expected near the lower end of the $2.5-$3.5 billion range. The board declared a quarterly dividend of 18 cents per share, payable Dec. 17, 2026, to shareholders of record as of Dec. 4.
General Motors’ Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Auto-Tires-Trucks space are Rivian Automotive, Inc. (RIVN - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Lucid Group, Inc. (LCID - Free Report) .
RIVN is expected to report third-quarter fiscal 2026 results on Oct. 29. The Zacks Consensus Estimate for loss is pegged at 67 cents per share. RIVN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FOXF is expected to report third-quarter fiscal 2026 results on Nov. 5. The Zacks Consensus Estimate for loss is pegged at 48 cents per share. FOXF currently carries a Zacks Rank #1.
LCID is expected to report third-quarter 2026 results on Nov. 9. The Zacks Consensus Estimate for loss is pegged at $2.78 per share. LCID currently carries a Zacks Rank #2.
View the Zacks #1 Rank List
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GM Q3 Earnings Beat Estimates on North America Strength
Key Takeaways
General Motors (GM - Free Report) reported third-quarter 2026 adjusted earnings of $3.7 per share, up 32.2% year over year. The figure surpassed the Zacks Consensus Estimate of $3.55. Higher wholesale volumes, favorable vehicle mix and cost efficiencies supported the outperformance.
Revenues increased 2.9% to $50.02 billion and beat the consensus estimate of $48.21 billion. Global wholesale volume rose to 1.03 million vehicles from 976,000 a year earlier. Adjusted earnings before interest and taxes (EBIT) increased 21.6% to $4.11 billion, while adjusted EBIT margin expanded 130 basis points to 8.2%.
General Motors Company Price, Consensus and EPS Surprise
General Motors Company price-consensus-eps-surprise-chart | General Motors Company Quote
GM's North America Business Gains Momentum
GM North America generated revenues of $41.42 billion, up 2.1% from the prior-year quarter. Wholesale volume increased to 870,000 vehicles from 840,000, supported by higher internal combustion engine (ICE) shipments. ICE volume increased by 53,000 units, partly offset by a 23,000-unit decline in electric vehicle volume.
The segment's adjusted EBIT surged 43.4% to $3.59 billion. Adjusted EBIT margin expanded 250 basis points to 8.7%. Lower warranty costs, favorable EV inventory adjustments and improved vehicle mix supported profitability. Higher commodity, logistics and manufacturing costs partly offset these benefits.
U.S. dealer inventory ended the quarter at 568,000 vehicles compared with 527,000 a year earlier. The company maintained pricing discipline, with incentives averaging 4.8% of manufacturer's suggested retail price, below the industry average of 6.6%.
General Motors' International Operations Face Pressure
GM International revenues increased 12.1% year over year to $4.09 billion. Wholesale volume climbed to 159,000 vehicles from 137,000, supported by higher shipments in South America.
However, adjusted EBIT declined 87.6% to $28 million. Higher manufacturing and logistics expenses, alongside a negative mark-to-market adjustment related to GM's investment in Momenta, weighed on profitability. Higher volumes and favorable foreign exchange movements provided partial relief.
GM's China joint ventures generated equity income of $32 million, down 60% year over year. Nevertheless, the China business delivered its eighth consecutive profitable quarter, supported by restructuring efforts and strong new-energy vehicle sales.
GM Financial Encounters Higher Credit Costs
GM Financial revenues declined marginally to $4.31 billion from $4.34 billion in the year-ago quarter. Ending earning assets increased to $126.9 billion from $126.5 billion.
Adjusted earnings before taxes declined 16.9% to $668 million. Lower interest expenses and higher retail yields were offset by increased provisions for loan losses and higher lease depreciation expenses. The financing arm paid a $250 million dividend to GM during the quarter, bringing year-to-date dividends to $1.2 billion.
General Motors' Digital Business Continues to Expand
OnStar ended the quarter with deferred revenues of $6.8 billion, up approximately 40% year over year. Recognized revenues exceeded $800 million, increasing 15%. The company remained on track to add approximately 1 million subscribers in 2026, approaching 13 million by year-end.
Super Cruise recognized revenues increased approximately 60%. GM delivered around 83,000 Super Cruise-equipped vehicles during the quarter, bringing year-to-date sales above 243,000 units. Management expects to exceed 850,000 subscribers by year-end, with the post-three-year prepaid subscription attach rate remaining between 30% and 40%.
GM's Cash Flow Strengthens Shareholder Returns
Automotive operating cash flow increased 32.6% to $8.05 billion. Adjusted automotive free cash flow jumped 40% to $5.88 billion, driven by higher automotive earnings and tariff-related timing benefits.
Capital expenditures totaled $2.33 billion for automotive operations. GM repurchased $2.5 billion of shares, retiring approximately 29 million shares, and distributed $200 million in dividends. Automotive cash and marketable securities totaled $23.1 billion, while total automotive liquidity reached $37.1 billion. The board also authorized a new $20 billion multi-year share repurchase program.
General Motors Updates 2026 Outlook
General Motors narrowed its full-year adjusted EBIT guidance to $14.5-$15.5 billion from $14-$16 billion. Adjusted earnings are now projected at $12.75-$13.75 per share, compared with the previous range of $12-$14.
The company raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion. It maintained expectations for an 8-10% adjusted EBIT margin in North America and capital spending, including battery joint-venture investments, of $10-$12 billion.
Management expects warranty savings toward the upper end of $1-$1.5 billion, while commodity inflation, including logistics and memory-chip costs, is projected at approximately $2 billion. Gross tariff costs are expected near the lower end of the $2.5-$3.5 billion range. The board declared a quarterly dividend of 18 cents per share, payable Dec. 17, 2026, to shareholders of record as of Dec. 4.
General Motors’ Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Auto-Tires-Trucks space are Rivian Automotive, Inc. (RIVN - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Lucid Group, Inc. (LCID - Free Report) .
RIVN is expected to report third-quarter fiscal 2026 results on Oct. 29. The Zacks Consensus Estimate for loss is pegged at 67 cents per share. RIVN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FOXF is expected to report third-quarter fiscal 2026 results on Nov. 5. The Zacks Consensus Estimate for loss is pegged at 48 cents per share. FOXF currently carries a Zacks Rank #1.
LCID is expected to report third-quarter 2026 results on Nov. 9. The Zacks Consensus Estimate for loss is pegged at $2.78 per share. LCID currently carries a Zacks Rank #2.